Goldman Files Become Exception in Denmark’s Asset-Sale Process

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Denmark’s decision to let lawmakers see secret documents on Goldman Sachs Group Inc.’s purchase of state assets will probably be a one-off.

The government says it’s making an exception in the case of Goldman’s 2014 investment in Dong Energy A/S after lawmakers on a committee overseeing the sale complained they weren’t given full access to the relevant files. Bjarne Corydon, who was finance minister at the time, said the information contained in the transaction papers was too sensitive even for the parliament committee.

Goldman’s merchant banking unit paid about $1.5 billion in 2014 for an 18 percent stake in Dong. Danish pension funds ATP and PFA A/S also invested in the utility as part of the same accord. Finance Minister Claus Hjort Frederiksen said this month he will release the documents more than a year after the transaction went through as lawmakers continue to argue over the deal. Goldman and PFA have said they have no objection to the files being made public.

But letting lawmakers see all the details in a bidding round “won’t apply elsewhere,” Jakob Ellemann-Jensen, a spokesman for the ruling Liberal Party, said in an interview on Friday. “It’s fine that it’ll apply in this case and that the parties involved have said they don’t mind information being disclosed to lawmakers.”

Coalition Split

The Goldman deal left an indelible mark on Danish politics. Disagreement over the Wall Street bank’s investment in state assets prompted a junior party in the former Social Democrat-led administration to quit the coalition in protest. Danes gathered in their thousands in front of the parliament to protest against the sale.

The government of Helle Thorning-Schmidt that oversaw the Goldman deal was ousted in June elections and Denmark is now ruled by the Liberal Party of Prime Minister Lars Loekke Rasmussen.

Goldman has since hired Anders Fogh Rasmussen, a Danish prime minister from 2001 to 2009 and former NATO head, to guide it through the political hurdles that have continued to emerge since it bought its stake in Dong.

Ellemann-Jensen says it’s important that potential investors in future rounds of state asset sales aren’t frightened away by a sense that everything they say in the context of confidential negotiations could be made public.

“What needs to be balanced in this case is that potential bidders may not wish to have their bids disclosed as they will reveal their business strategies,” he said.

Scaring Investors

Rene Christensen, a spokesman for the Danish People’s Party which lobbied to have the documents released, has said there’s no risk their contents might trigger political demands that a new deal be negotiated.

“Altering the deal isn’t really what it’s about,” Christensen said by phone. “It’s about having had a finance minister who said he couldn’t trust the committee.” Denmark’s lawmakers deserve to know “what was so important about this deal that we weren’t allowed to see more details,” he said.

According to Ellemann-Jensen, Denmark risks jeopardizing its appeal as a target for offshore investors if it enforces the same standards of transparency on all future bidders.

“It would be a shame to make this standard protocol for the future,” he said. “That would likely keep bidders away and then we may not get the best bids in the future.”

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